Bankrupting America’s Spending Daily

Spending Daily | April 26, 2013

“Bill to End Airport Delays Headed for House Vote”

The Associated Press reports, “Legislation to end furloughs of air traffic controllers and delays for millions of travelers is headed to a House vote after a dark-of-night vote in the Senate that took place after most lawmakers had left the Capitol for a weeklong vacation. The bill passed late Thursday without even a roll call vote, and House officials indicated it likely would be brought up for quick approval there. Under the legislation, the Federal Aviation Administration would gain authority to transfer up to $253 million from accounts that are flush into other programs, to ‘prevent reduced operations and staffing’ through the Sept. 30 end of the fiscal year. In addition to restoring full staffing by controllers, Senate officials said the available funds should be ample enough to prevent the closure of small airport towers around the country.”

“The stunt pilots misread the gauges”

The Chicago Tribune editorializes, “Somewhere between the Oval Office and a snarled airport near you, the stunt pilots in the Obama administration made a terrible miscalculation. Most citizens are able to read. They’re seeing numerous articles in the public prints explaining how the Federal Aviation Administration’s layoff scheme created a crisis that simply doesn’t have to be. Bloomberg News weighed in with a detailed analysis explaining that the FAA ‘has more than enough air traffic controllers to manage furloughs without flight delays. … The FAA, with the consent of the controllers’ union, could keep sequestration from affecting flights by targeting furloughs at airports with excess numbers of controllers, but the agency has declined to pursue that strategy.’ That’s key: Over the year and a half since President Barack Obama signed the law that required spending curbs through sequestration in 2013, you haven’t seen the FAA, or its parent the Transportation Department, or its parent the White House, trying to absorb a relatively small budget cut in ways that would least inconvenience fliers and least imperil the U.S. economy. Quite the opposite: This whole exercise appears to have been an effort to demonstrate that the federal enterprise cannot survive cuts to the growth of spending.”

“Besides the FAA, Furlough Impacts Are Mostly Muted”

The Wall Street Journal reports, “President Barack Obama warned in March that across-the-board budget cuts would lead to significant pay cuts and furloughs for ‘hundreds of thousands of Americans who serve their country.’ The layoffs finally kicked in this week—most notably at the Federal Aviation Administration, where furloughs of air-traffic controllers led to flight delays—yet many agencies have found ways to make the required savings and have spared government worker paychecks. Agency chiefs, under pressure from the public and federal-employee unions, have cut travel and contractor spending, trimmed office hours and delayed some furloughs, achieving dramatic reductions from some of the dire predictions officials made earlier this year.”

U.S. Economic Growth Below Expectations

The Wall Street Journal reports, “The U.S. economy failed to gather as much steam as expected in the first quarter, potentially setting up another year of sluggish gains with signs already emerging of slowing hiring and investment. The nation’s gross domestic product, a measure of all goods and services produced in the economy, advanced at a 2.5% annual rate between January and March, the Commerce Department said Friday. Economists surveyed by Dow Jones Newswires had forecast a 3.2% annualized expansion. Still, the GDP gain represented a rebound from the 0.4% growth in the prior quarter. The economy has now grown for 15 consecutive quarters, but the average pace—just above 2% annually—is weak by historical standards.”

Army Spent $5 Million on Garbage Incinerators It Never Used

The Washington Guardian reports, “Talk about burning taxpayer money! The U.S. Army Corps of Engineers spent more than $5 million to have a contractor build two garbage incinerators at a forward-operating base in Afghanistan, but then the military never used the equipment because officials closed out the project and released the contractors before the machines actually worked. So troops at the Salerno forward-operating base are back to burning their garbage in open-pit fires, despite health concerns over breathing toxic fumes. And the unused incinerators have created their own health worries, allowing stagnant rain water to pool around them and form a potential breeding ground for malaria-infested mosquitos. The whole scenario has left the chief U.S. watchdog in Afghanistan incredulous.”

“Nearly Sideswiped By Another Green Car”

Kimberley Strassel writes in The Wall Street Journal, “Fisker Automotive featured in a House hearing this week, as congressmen questioned how that luxury electric-car maker—now in financial straits—ever qualified for a $529 million federal loan guarantee. The Obama Energy Department is facing some awkward questions—a la Solyndra—about what role politics played in granting that subsidy. Perhaps we need not guess. For an excellent study in how green-energy cronyism works, look instead to the near miss (for taxpayers) of Next AutoWorks. That startup applied for a $320 million federal loan guarantee in 2009, promising a Louisiana factory that would produce cheap and fuel-efficient cars. Next didn’t, ultimately, get its loans. It wasn’t from a lack of political lobbying. Emails referenced in a House Oversight subcommittee hearing this week confirm every suspicion about the degree to which powerful moneymen worked the system on behalf of their investments, pushing their political contacts to roll over Energy’s credit department. … The Energy Department has long claimed that its loans were made on merit, and that in this case merit won out. Yet would that have been true if Solyndra hadn’t happened? The emails show how well-connected benefactors used their political pull to go around credit officials and try to drive the process ‘top down.’ This is called ‘politics,’ and it underlines the folly of government moonlighting as an investor.”

“Debt, Growth And The Austerity Debate”

Carmen Reinhart and Kenneth S. Rogoff editorialize in the New York Times, “In May 2010, we published an academic paper, ‘Growth in a Time of Debt.’ Its main finding, drawing on data from 44 countries over 200 years, was that in both rich and developing countries, high levels of government debt — specifically, gross public debt equaling 90 percent or more of the nation’s annual economic output — was associated with notably lower rates of growth. … Our research, and even our credentials and integrity, have been furiously attacked in newspapers and on television. Each of us has received hate-filled, even threatening, e-mail messages, some of them blaming us for layoffs of public employees, cutbacks in government services and tax increases. As career academic economists (our only senior public service has been in the research department at the International Monetary Fund) we find these attacks a sad commentary on the politicization of social science research. But our feelings are not what’s important here. … A sober reassessment of austerity is the responsible course for policy makers, but not for the reasons these authors suggest. Their conclusions are less dramatic than they would have you believe. Our 2010 paper found that, over the long term, growth is about 1 percentage point lower when debt is 90 percent or more of gross domestic product. The University of Massachusetts researchers do not overturn this fundamental finding, which several researchers have elaborated upon.”

“Senate advances online sales tax measure”

According to The Hill, “After the threat of a midnight vote and weekend work, the Senate agreed Thursday to advance a bill that would allow states to collect online sales tax. In a 63-30 vote, the Senate ended debate on The Marketplace Fairness Act, S. 743, which would empower states to collect taxes on purchases made online by consumers in their states.”

GOP Claims Spending in the House Has Dropped

The Associated Press reports, “Republicans say spending for House operations, including lawmaker offices, has dropped by more than $200 million since they took control three years ago. GOP lawmakers said Thursday they saved the money mainly by trimming the budgets of committees, leadership offices and individual lawmaker offices. The House imposed an 8.2 percent reduction on lawmakers’ personal office budgets in March, after automatic, across-the-board cuts inmost federal programs took effect. That came on top of 11 percent cuts to office budgets during 2011 and 2012. Committees also took an 11 percent hit this year. ‘Many families and small businesses are cutting back, and it’s only right that the House of Representatives lead by example,’ House Speaker John Boehner, R-Ohio, said. … Lawmaker salaries, which are set by law, are unchanged at $174,000 for rank-and-file members.”

Senate Dems Express Concerns Over Implementing Health Care Changes

The New York Times reports, “Democratic senators, at a caucus meeting with White House officials, expressed concerns on Thursday about how the Obama administration was carrying out the health care law they adopted three years ago. Democrats in both houses of Congress said some members of their party were getting nervous that they could pay a political price if the rollout of the law was messy or if premiums went up significantly. … Senator Tom Harkin, Democrat of Iowa and chairman of the appropriations subcommittee on health care, said he was extremely upset with Mr. Obama’s decision to take money from public health prevention programs and use it to publicize the new law, which creates insurance marketplaces in every state. ‘I am greatly disappointed — beyond upset — that the administration chose to help pay for the Affordable Care Act in fiscal year 2013 by raiding the Public Health and Prevention Fund,’ Mr. Harkin said.”

Is Obamacare A ‘Train Wreck’?

ABC News reports, “It has been a little more than three years since since Obamacare was signed into law and it is still 251 days until the majority of the law kicks in. After that, nobody really know what’s going to happen. One senior Democrat recently predicted a ‘train wreck’ unless the Obama administration does a better job explaining how things are going to work. The one thing that everyone knows for sure is that the law is complicated. Republicans have assembled a seven-foot tower of paper to represent all of the regulations and rules that will go along with the law. Americans’ still don’t really understand or like the law. But they don’t want to get rid of it. Republicans no longer agree that the law should be repealed. But even Democrats are publicly nervous about what happens when the law finally takes effect and people have to buy insurance or pay a tax. What lies at the end of the line on Jan. 1, 2014? A ‘train wreck’ if you ask Sen. Max Baucus, a key author of the law who helped dash progressive dreams of a more liberal overhaul.”

BankruptingAmerica.org is an educational project of Public Notice, an independent, nonpartisan, non-profit, 501(c)(4) organization dedicated to providing facts and insight on the effects public policy has on Americans’ financial well-being.

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